Economic Systems Quiz

What is the structure of methods and principles that a society uses to produce and distribute goods and services?

• Political system

• Social system

• Economic system

• Government system

Who is known for the doctrine of Laissez Faire, which advocates for a 'hands off' policy in the marketplace?

• Milton Friedman

• John Maynard Keynes

• Adam Smith

• Karl Marx

Which economic system relies on habit, custom, or ritual to decide the three key economic questions?

• Traditional economy

• Mixed economy

• Command economy

• Market economy

What is an advantage of a traditional economy?

• Everyone knows their role

• Encourages new ideas and new ways of doing things

• Encourages breaking tradition

• High standard of living

Which country is an example of a command economy where everything, including media and tourism, is owned by the government?

• China

• United States

• Russia

• North Korea

What is a disadvantage of a command economy?

• Decentralized decision making

• Allows most citizens goods and services that they may not have been able to afford

• Rewards only productive resources; does not provide for people too old, or too sick to work

• High degree of consumer satisfaction

Which economic system is primarily based on supply and demand decisions made in the best interests of individuals?

• Mixed economy

• Traditional economy

• Command economy

• Market economy

What is an advantage of a market economy?

• Rewards only productive resources; does not provide for people too old, or too sick to work

• Able to adjust to change gradually

• Loss of individual freedom to choose

• Production of low quality goods

What is the process of selling businesses or services operated by the government to individual investors and then allowing them to compete in the marketplace?

• Nationalization

• Privatization

• Monopolization

• Centralization